Taiwan’s major life insurance companies are poised to spend more on real estate investments to digest idle funds ahead of two auctions in the Greater Taipei area this week and the property market’s high season.
Last week, the board of Cathay Life Insurance Co (國泰人壽), the nation’s largest insurance provider by assets and a subsidiary of Cathay Financial Holding Co (國泰金控), approved a plan to acquire more real estate properties in the Greater Taipei area and authorized its chairman to purchase real estate valued up to NT$3.85 billion (US$121.11 million), according to its filing to Taiwan Stock Exchange.
The Taiwan Life Insurance Co’s (台灣人壽) board passed a similar decision, but declined to disclose the amount involved.
Taipei County Government is due to auction 15 land plots in the Sinhuang area on Friday. The properties sit on 2.3 hectares of land with a floor price of NT$6.19 billion, or NT$850,000 to NT$900,000 per ping (NT$272,700 per square meter).
Taiwan Realty Co (台灣房屋) expected the plots to cost NT$1 million per ping given its close location to a mass rapid transit system that will soon be completed.
The auction on Sept. 28 for a 50-year lease to use a plot in the Da-an District of Taipei City may also attract active participation, as the land could be turned into a hotel or apartment complex, the real estate brokerage said.
Real estate investment totaled NT$135.6 billion as of June 30, or 5.2 percent of Cathay Life’s assets, the company’s financial statement showed.
Late last month, the board of Fubon Life Insurance Co (富邦人壽), a subsidiary of Fubon Financial Holding Co (富邦金控), authorized its chairman to acquire quality properties in the Greater Taipei area within a limit of NT$20 billion.
Cumulative real estate investment reached NT$59.6 billion for the first half, taking up only 4.7 percent of Fubon Life’s investment portfolio, the firm’s report showed.
Fubon Financial president Victor Kung (龔天行) has said the company has sought to increase its stake in real estate investment, but has made little headway because of scarce supply.
Shin Kong Life Insurance Co (新光人壽), the insurance arm of Shin Kong Financial Holding Co (新光金控), still has about NT$12.5 billion earmarked for real estate investment.
Real estate investment accounted for 7.6 percent of the insurer’s NT$1.34 trillion assets at the end of the second quarter, according to the company’s statistics.
In a related development, demand for housing units in existing buildings remains healthy in the current quarter, although pre-sale home transactions dropped after the central bank tightened credit in June, a report by Sinyi Realty Co (信義房屋) showed.
Pre-sale homes accounted for 6.8 percent of residential real estate transactions in Taipei County in July and last month, from 9.2 percent for the whole of the second quarter, the report said.
Apartments one to five years old remained steady at 20.8 percent of total transfers so far this quarter, compared with 20 percent last quarter, according to the report.
Stanley Su (蘇啟榮), senior researcher at Sinyi, said the figures showed apartments that need little refurbishment remain popular among potential home buyers.
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